Walsh Trading Daily Insights
Commentary
October Lean Hogs opened lower, traded down to the session low at 95.025 and recovered, rallying the rest of the session to the high at 97.00. It settled near the high at 96.825. The opening beat down took price below support at 95.30 and the rally failed yet again to overtake resistance at 97.30, keeping price in the trading range. The trading range since October became the lead contract is the low at 92.425 and the high at 97.875. It is in the upper end of the range and that is a positive, in my opinion. Cutouts are hanging near the highs and slaughter numbers remain low as traders push price within the trading range waiting for a supposed increase in hog supply. A break out above 97.30 could see price test resistance at 98.475. Resistance then comes in at 100.075. A break down from settlement could see price test support at 95.30. Support then comes in at 93.50.
The Pork Cutout Index increased and is at 127.48 as of 7/29/2022.
The Lean Hog Index increased and is at 121.42 as of 7/28/2022.
Estimated Slaughter for Monday is 408,000, which is below last week’s 450,000 and last year’s 414,000.
September Feeder Cattle was all about corn once again as it was lower overnight and Feeders gap opened higher Monday morning on the corn weakness, in my opinion. Feeders raced to the session high at 183.625 and then just as quickly fell to the session low at 182.125. It consolidated the rest of the session and settled at 183.10. The gap is from the Friday high at 181.925 and the Monday low at 182.125. The rally and settlement took price past resistance at 182.70. Follow-through on Tuesday could see price approach resistance at 184.375. A failure from 182.70 could see futures revisit support at the gap. Support then comes in at 180.80.
The Feeder Cattle Index jumped and is at 174.74 as of 7/29/2022.
October Live Cattle continued its trade around the key level at 142.225. It opened at the low of the day at 141.90 and then rallied to the high at 142.925 in the first 15 minutes of the day. It drifted the rest of the session and settled at 142.625. Cattle continued in its lackluster trading as it waits for something to change in the cash market. The positive of the Monday session was a session away from settling at the key level (142.225), it was able to settle above this level. Follow-through buying on Tuesday could see price work its way higher and approach resistance at 144.025. A failure from settlement could see price pull back towards support at the rising 13-DMA now at 140.875. Support then comes in at 140.175.
Boxed beef cutouts were higher as choice cutouts increased 1.36 to 270.60 and select increased 0.65 to 242.90. The choice/ select spread widened and is at 27.70 and the load count was 99.
Monday’s estimated slaughter is 124,000, which is even with last week and above last year’s 117,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading in the Western Cornbelt has been mostly inactive on very light demand. Not enough purchases for a market trend. In the Southern Plains and Nebraska negotiated cash trading has been at a standstill. Last week in the Southern Plains live purchases traded at 135.00. For the prior week in Nebraska live and dressed purchases traded at 138.00 and at 225.00, respectively. For the previous week in the Western Cornbelt live and dressed purchases traded from 141.00-145.00 and from 224.00-228.00, respectively.
The USDA is indicating cash trades for live cattle at 142.00 and none on a dressed basis (so far).
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays (except holiday weeks) and our next webinar will be on Thursday, August 04, 2022 at 2:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
tested support at the
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.